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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
CORVAS INTERNATIONAL, INC.
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(Name of Issuer)
COMMON STOCK
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(Title of Class of Securities)
221005 10 1
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(CUSIP Number)
MARC SCHNEIDMAN
BVF PARTNERS, L.P.
333 WEST WACKER DRIVE, SUITE 1600
CHICAGO, ILLINOIS 60606
(415) 288-2396
--------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
SEPTEMBER 8, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box / /.
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following page(s))
Page 1 of 7 Pages
---
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CUSIP No. 221005 10 1 13D Page 2 of 7 Pages
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- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
BIOTECHNOLOGY VALUE FUND, L.P.
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) /X/
of a Group* (b) / /
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds*
WC
- -------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
- -------------------------------------------------------------------------------
Number of Shares (7) Sole Voting
Beneficially Owned Power -0-
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting
Power 1,557,506
--------------------------------------------------
(9) Sole Dispositive
Power -0-
--------------------------------------------------
(10) Shared Dispositive
Power 1,557,506
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
1,557,506
- -------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
10.1%
- -------------------------------------------------------------------------------
(14) Type of Reporting Person*
PN
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*SEE INSTRUCTION BEFORE FILLING OUT!
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CUSIP No. 221005 10 1 13D Page 3 of 7 Pages
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- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
BVF PARTNERS, L.P.
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) /X/
of a Group* (b) / /
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds*
OO
- ------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
- -------------------------------------------------------------------------------
Number of Shares (7) Sole Voting
Beneficially Owned Power -0-
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting
Power 3,302,743
--------------------------------------------------
(9) Sole Dispositive
Power -0-
--------------------------------------------------
(10) Shared Dispositive
Power 3,302,743
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,302,743
- -------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
21.4%
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(14) Type of Reporting Person*
PN
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*SEE INSTRUCTION BEFORE FILLING OUT!
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CUSIP No. 221005 10 1 13D Page 4 of 7 Pages
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- -------------------------------------------------------------------------------
(1) Names of Reporting Persons. S.S. or I.R.S. Identification Nos. of Above
Persons
BVF INC.
- -------------------------------------------------------------------------------
(2) Check the Appropriate Box if a Member (a) /X/
of a Group* (b) / /
- -------------------------------------------------------------------------------
(3) SEC Use Only
- -------------------------------------------------------------------------------
(4) Source of Funds*
WC, OO
- -------------------------------------------------------------------------------
(5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e)
- -------------------------------------------------------------------------------
(6) Citizenship or Place of Organization
DELAWARE
- -------------------------------------------------------------------------------
Number of Shares (7) Sole Voting
Beneficially Owned Power -0-
by Each Reporting --------------------------------------------------
Person With (8) Shared Voting
Power 3,302,743
--------------------------------------------------
(9) Sole Dispositive
Power -0-
--------------------------------------------------
(10) Shared Dispositive
Power 3,302,743
- -------------------------------------------------------------------------------
(11) Aggregate Amount Beneficially Owned by Each Reporting Person
3,302,743
- -------------------------------------------------------------------------------
(12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares*
- -------------------------------------------------------------------------------
(13) Percent of Class Represented by Amount in Row (11)
21.4%
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(14) Type of Reporting Person*
IA, CO
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*SEE INSTRUCTION BEFORE FILLING OUT!
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CUSIP No. 221005 10 1 13D Page 5 of 7 Pages
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* SEE INSTRUCTIONS BEFORE FILLING OUT!
This Amendment No. 1 (the "Amendment") to the Statement on Schedule
13D, dated August 12, 1998 (as so amended, the "Statement"), is filed with
the Securities and Exchange Commission on behalf of Biotechnology Value Fund,
L.P., a Delaware limited partnership ("BVF"), BVF Partners L.P., a Delaware
limited partnership ("Partners"), and BVF Inc., a Delaware corporation ("BVF
Inc." and, together with BVF and Partners, the "Reporting Persons") with
respect to the Common Stock, no par value (the "Stock"), of Corvas
International, Inc., a Delaware corporation ("Corvas").
Item 4 is hereby amended to read in its entirety as follows:
ITEM 4. PURPOSE OF TRANSACTIONS.
The external environment for small, quality biotechnology
companies is undergoing a period of rapid and profound change. The
convergence of a depressed equity market, the possible slowing pace of a
corporate partnering activity, and escalating cash burn rates could produce
an industry shake-out in which financially conservative companies prosper and
financially weak companies falter. This changing environment may call for
managements and Boards to husband capital by significantly reducing cash burn
rates and to otherwise alter preconceived business plans. If managed
pro-actively and intelligently, this period could yield attractive returns
for shareholders. However, the consequences of complacency and the potential
for irreparable missteps are great. BVF may seek to work with company
managements, Boards and shareholders to maximize shareholder value and,
specifically, to protect the substantial value of funded, partnered programs
from unnecessary dilution. BVF IS AMENDING ALL ITS 13-D FILINGS WITH THIS
NOTICE.
Item 5 is hereby amended to read in its entirety as follows:
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) BVF beneficially owns 1,557,506 shares of the Stock,
Partners beneficially owns 3,302,743 shares of the Stock, and BVF Inc.
beneficially owns 3,302,743 shares of the Stock, approximately 10.1%, 21.4%
and 21.4% respectively, of the aggregate number of shares outstanding as of
August 7, 1998 (as reported in Corvas' most recent quarterly statement on
Form 10-Q).
(b) BVF shares voting and dispositive power over the 1,557,506
shares of the Stock it beneficially owns with Partners. Parnters and BVF
Inc. share voting and dispositive power over the 3,302,743 shares of the
Stock they beneficially own with, in addition to BVF, the managed accounts on
whose behalf Partners, as investment manager, purchased such shares. The
managed accounts on whose behalf Partners owns shares of the Stock are
Investment 10 L.L.C., an Illinois limited liability company ("ILL10"),
Palamundo, L.D.C., a limited duration company organized under the laws of the
Cayman Islands ("Palamundo"), ZPG Securities, L.L.C., a New York limited
liability company ("ZPG") and Biotechnology Value Fund, Ltd., a Cayman
Islands Corporation ("BVF Ltd."). ILL10, Palamundo, ZPG and BVF Ltd. are
collectively referred to herein as the "Accounts." The Accounts specialize
in holding biotechnology stock for investment purposes and the business
address of each is BVF Partners L.P., 333 West Wacker Drive, Suite 1600,
Chicago, Illinois 60606.
(c) On August 24, 1998, Corvas issued warrants to purchase
375,000 shares of Common Stock in the form of Exhibit C to BVF and the
Accounts in exchange for warrants to purchase a like number of shares in
Corvas purchased by BVF and the other managed accounts on July 2, 1998. No
other transactions in the Stock have been effected by the Reporting Persons
during the past 60 days.
(d) The Accounts are entitled to receive dividends and any sale
proceeds with respect to the Stock in proportion to their respective
ownership interests therein.
Item 6 is hereby amended to add the following paragraph at the end:
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
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CUSIP No. 221005 10 1 13D Page 6 of 7 Pages
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On August 24, 1998, Corvas issued warrants to purchase up to
375,000 shares of Common Stock in the form of Exhibit C to BVF and the
Accounts in exchange for warrants to purchase a like number of shares of
Corvas owned by BVF and the Accounts issued pursuant to that certain Stock
and Warrant Purchase Agreement, dated as of February 2, 1996, between the
Company and certain investors named therein.
Item 7 is hereby amended to read in its entirety as follows:
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A -- Agreement Regarding Joint Filing.
Exhibit B -- Transactions in the Stock by the Reporting Persons
during the last 60 days.
Exhibit C -- Form of Warrant to Purchase Shares of Common Stock
of Corvas International, Inc.
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: September 8, 1998.
BIOTECHNOLOGY VALUE FUND, L.P.
By: BVF Partners L.P., its general partner
By: BVF Inc., its general partner
By: /s/ Mark N. Lampert
--------------------------
Mark N. Lampert
President
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CUSIP No. 221005 10 1 13D Page 7 of 7 Pages
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BVF PARTNERS L.P.
By: BVF Inc., its general partner
By: /s/ Mark N. Lampert
--------------------------
Mark N. Lampert
President
BVF INC.
By: /s/ Mark N. Lampert
--------------------------
Mark N. Lampert
President
<PAGE>
EXHIBIT A
AGREEMENT REGARDING JOINT FILING
The undersigned, Biotechnology Value Fund, L.P., a Delaware limited
partnership, and BVF Partners L.P., a Delaware limited partnership, and BVF
Inc., a Delaware corporation, hereby agree and acknowledge that the Amendment
containing the information required by Schedule 13D, to which this Agreement
is attached as an exhibit, is filed on behalf of each of them. The
undersigned further agree that any further amendments or supplements thereto
shall also be filed on behalf of each of them.
Dated: September 8, 1998.
BIOTECHNOLOGY VALUE FUND, L.P.
By: BVF Partners L.P., its general partner
By: BVF Inc., its general partner
By: /s/ Mark N. Lampert
--------------------------
Mark N. Lampert
President
BVF PARTNERS L.P.
By: BVF Inc., its general partner
By: /s/ Mark N. Lampert
--------------------------
Mark N. Lampert
President
BVF INC.
By: /s/ Mark N. Lampert
---------------------------
Mark N. Lampert
President
<PAGE>
EXHIBIT C
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER SUCH ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
REGISTRATION IS NOT REQUIRED OR UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT.
THIS WARRANT IS VOID AFTER 5:00 P.M., SAN DIEGO TIME, ON FEBRUARY 1, 2002 OR
UPON EARLY TERMINATION AS PROVIDED IN SECTION 9 HEREOF.
WARRANT NO. ___
WARRANT TO PURCHASE
_______ SHARES OF COMMON STOCK OF
CORVAS INTERNATIONAL, INC.
This certifies that _______________________ (the "Holder"), or assigns, for
value received, is entitled to purchase from Corvas International, Inc., a
Delaware corporation (the "Company"), having a place of business at 3030 Science
Park Road, San Diego, CA 92121, __________________ (________) fully paid and
nonassessable shares of the Company's Common Stock ("Common Stock") for cash at
a price of six dollars ($6.00) per share (the "Stock Purchase Price") at any
time or from time to time up to and including 5:00 p.m. (Pacific time) on the
first to occur of the Call Date (as defined in Section 9 hereof) or February 1,
2002 (such first date to occur is hereinafter referred to as the "Expiration
Date" and such period is hereinafter referred to as the "Exercise Period"), upon
surrender to the Company at its principal office (or at such other location as
the Company may advise the Holder in writing) of this Warrant properly endorsed
with the Form of Subscription attached hereto duly filled in and signed and upon
payment in cash or by check, or by net exercise pursuant to Section 9.2 below,
of the aggregate Stock Purchase Price for the number of shares for which this
Warrant is being exercised determined in accordance with the provisions hereof.
This Warrant is issued in exchange for one of the Warrants issued pursuant to
that certain Stock and Warrant Purchase Agreement, dated as of February 2, 1996,
between the Company and certain investors named therein (the "Purchase
Agreement"). The Stock Purchase Price and the number of shares purchasable
hereunder are subject to adjustment as provided in Section 3 of this Warrant.
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This Warrant is subject to the following terms and conditions:
1. EXERCISE; ISSUANCE OF CERTIFICATES; PAYMENT FOR SHARES. This Warrant
is exercisable at the option of the holder of record hereof, at any time or from
time to time, up to the Expiration Date for all or any part of the shares of
Common Stock (but not for a fraction of a share) which may be purchased
hereunder. The Company agrees that the shares of Common Stock purchased under
this Warrant shall be and are deemed to be issued to the Holder hereof as the
record owner of such shares as of the close of business on the date on which
this Warrant shall have been surrendered, properly endorsed, the completed,
executed Form of Subscription delivered and payment made for such shares.
Certificates for the shares of Common Stock so purchased, together with any
other securities or property to which the Holder hereof is entitled upon such
exercise, shall be delivered to the Holder hereof by the Company at the
Company's expense within a reasonable time after the rights represented by this
Warrant have been so exercised. In case of a purchase of less than all the
shares which may be purchased under this Warrant, the Company shall cancel this
Warrant and execute and deliver a new Warrant or Warrants of like tenor for the
balance of the shares purchasable under the Warrant surrendered upon such
purchase to the Holder hereof within a reasonable time. Each stock certificate
so delivered shall be in such denominations of Common Stock as may be requested
by the Holder hereof and shall be registered in the name of such Holder.
2. SHARES TO BE FULLY PAID; RESERVATION OF SHARES. The Company covenants
and agrees that all shares of Common Stock which may be issued upon the exercise
of the rights represented by this Warrant will, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable and free from all
preemptive rights of any stockholder and free of all taxes, liens and charges
with respect to the issue thereof. The Company further covenants and agrees
that during the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and reserved, for
the purpose of issue or transfer upon exercise of the subscription rights
evidenced by this Warrant, a sufficient number of shares of authorized but
unissued Common Stock, or other securities and property, when and as required to
provide for the exercise of the rights represented by this Warrant. The Company
will take all such action as may be necessary to assure that such shares of
Common Stock may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of any domestic securities
exchange upon which the Common Stock may be listed; PROVIDED, HOWEVER, that the
Company shall not be required to effect a registration under Federal or State
securities laws with respect to such exercise (except as contemplated by the
Purchase Agreement). The Company will not take any action which would result in
any adjustment of the Stock Purchase Price (as adjusted under Section 3 hereof)
if the total number of shares of Common Stock issuable after such action upon
exercise of all outstanding warrants, together with all shares of Common Stock
then outstanding and all shares of Common Stock then issuable upon exercise of
all options and upon the conversion of all convertible securities then
outstanding, would exceed the total number of shares of Common Stock then
authorized by the Company's Certificate of Incorporation.
3. ADJUSTMENT OF STOCK PURCHASE PRICE AND NUMBER OF SHARES. The Stock
Purchase Price and the number of shares purchasable upon the exercise of this
Warrant shall be subject to adjustment from time to time upon the occurrence of
certain events described in this Section 3. Upon each adjustment of the Stock
Purchase Price, the Holder of this Warrant shall thereafter be entitled to
purchase, at the Stock Purchase Price resulting from such adjustment, the number
of shares obtained by multiplying the Stock Purchase Price in effect immediately
prior to such adjustment by the number of shares purchasable pursuant hereto
immediately prior to such adjustment, and dividing the product thereof by the
Stock Purchase Price resulting from such adjustment.
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3.1 SUBDIVISION OR COMBINATION OF STOCK. In case the Company
shall at any time after , 1998 (the "Original Warrant Issue Date")
subdivide its outstanding shares of Common Stock into a greater number of
shares, the Stock Purchase Price in effect immediately prior to such
subdivision shall be proportionately reduced, and conversely, in case the
outstanding shares of Common Stock of the Company shall be combined into a
smaller number of shares, the Stock Purchase Price in effect immediately
prior to such combination shall be proportionately increased.
3.2 DIVIDENDS IN COMMON STOCK, OTHER STOCK, PROPERTY,
RECLASSIFICATION. If at any time or from time to time the Holders of Common
Stock (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received or become entitled to receive,
without payment therefor,
(a) Common Stock or any shares of stock or other securities
which are at any time directly or indirectly convertible into or exchangeable
for Common Stock, or any rights or options to subscribe for, purchase or
otherwise acquire any of the foregoing by way of dividend or other distribution,
(b) any cash paid or payable otherwise than as a cash dividend,
or
(c) Common Stock or additional stock or other securities or
property (including cash) by way of spinoff, split-up, reclassification,
combination of shares or similar corporate rearrangement, (other than (i) shares
of Common Stock issued as a stock split, adjustments in respect of which shall
be covered by the terms of Section 3.1 above or (ii) an event for which
adjustment is otherwise made pursuant to Section 3.3 below), then and in each
such case, the Holder hereof shall, upon the exercise of this Warrant, be
entitled to receive, in addition to the number of shares of Common Stock
receivable thereupon, and without payment of any additional consideration
therefor, the amount of stock and other securities and property (including cash
in the cases referred to in clauses (b) and (c) above) which such Holder would
hold on the date of such exercise had he been the holder of record of such
Common Stock as of the date on which holders of Common Stock received or became
entitled to receive such shares or all other additional stock and other
securities and property.
3.3 REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any capital reorganization of the capital stock of the Company, or any
consolidation or merger of the Company with another corporation, or the sale of
all or substantially all of its assets to another corporation shall be effected
in such a way that holders of Common Stock shall be entitled to receive stock,
securities, or other assets or property, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful and
adequate provisions shall be made whereby the holder hereof shall thereafter
have the right to purchase and receive (in lieu of the shares of the Common
Stock of the Company immediately theretofore purchasable and receivable upon the
exercise of the rights represented hereby) such shares of stock, securities or
other assets (including cash) or property as may be issued or payable with
respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such stock immediately theretofore
purchasable and receivable upon the exercise of the rights represented hereby.
In any reorganization described above, appropriate provision shall be made with
respect to the rights and interests of the Holder of this Warrant to the end
that the provisions hereof (including, without limitation, provisions for
adjustments of the Stock Purchase Price and of the number of shares purchasable
and receivable upon the exercise of this Warrant) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise hereof (including an
immediate adjustment, by reason of such reorganization or reclassification, of
the Stock Purchase Price to the value for the Common Stock reflected by the
terms of such reorganization or reclassification if the value so reflected is
less than the Stock Purchase Price in effect immediately prior to such
reorganization or reclassification). In the event of a merger or consolidation
of the Company as a result of which a greater or lesser
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number of shares of common stock of the surviving corporation are issuable to
holders of Common Stock of the Company outstanding immediately prior to such
merger or consolidation, the Stock Purchase Price in effect immediately prior
to such merger or consolidation shall be adjusted in the same manner as
though there were a subdivision or combination of the outstanding shares of
Common Stock of the Company. The Company will not effect any such
consolidation, merger or sale unless, prior to the consummation thereof, the
successor corporation (if other than the Company) resulting from such
consolidation or the corporation purchasing such assets shall assume by
written instrument, executed and mailed or delivered to the registered Holder
hereof at the last address of such Holder appearing on the books of the
Company, the obligation to deliver to such Holder such shares of stock,
securities or assets as, in accordance with the foregoing provisions, such
Holder may be entitled to purchase.
3.4 ISSUANCE OF ADDITIONAL SHARES. The Stock Purchase Price in
effect from time to time shall be subject to adjustment upon the issuance of
Common Stock or Convertible Securities (as hereinafter defined) so long as any
Warrants are then issued and outstanding.
(a) SPECIAL DEFINITIONS. For purposes of this Section 3.4, the
following definitions shall apply:
(i) "Option" shall mean contractual rights, options or
warrants to subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.
(ii) "Warrants" shall mean, collectively, this Warrant and
the other warrants issued on the Original Warrant Issue Date in connection with
the transaction with respect to which this Warrant was issued.
(iii) "Convertible Securities" shall mean any evidences of
indebtedness, shares (other than Common Stock and Warrants) or other securities
directly or indirectly convertible into or exchangeable for Common Stock.
(iv) "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued (or, pursuant to Section 3.4(c), deemed to be
issued) by the Company after the Original Warrant Issue Date, other than shares
of Common Stock issued or issuable:
(1) pursuant to Options, Warrants or Convertible
Securities outstanding on the Original Warrant Issue Date;
(2) to directors, officers or employees of, or
consultants to, the Company pursuant to any plan or agreement approved by the
Board of Directors, subject to adjustment for all subdivisions and combinations;
(3) upon any event for which adjustment is made
pursuant to Section 3 hereof;
(4) by way of dividend or other distribution on shares
excluded from the definition of Additional Shares of Common Stock by the
foregoing clauses (i), (ii) or (iii) or this clause (iv) or on shares of Common
Stock so excluded;
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(5) pursuant to any equipment leasing, borrowing or
similar transaction approved by the Board of Directors; provided, however, that
for the three year period commencing on the Original Warrant Issue Date, shares
issued or issuable pursuant to such transactions shall not exceed a number equal
to five percent (5%) of the then issued and outstanding Common Stock; or
(6) in connection with any transaction approved by the
written consent of the holders of the Warrants representing at least two-thirds
of Common Stock then issuable upon exercise of the Warrants.
(b) NO ADJUSTMENT OF STOCK PURCHASE PRICE. No adjustment of the
Stock Purchase Price shall be made in respect of the issuance of Additional
Shares of Common Stock unless the consideration per share for an Additional
Share of Common Stock issued or deemed to be issued by the Company is less than
the Stock Purchase Price in effect on the date of the issue of such Additional
Shares.
(c) ISSUANCE OF SECURITIES DEEMED TO BE AN ISSUANCE OF
ADDITIONAL SHARES OF COMMON STOCK.
(i) In the event the Company at any time or from time to
time after the Original Warrant Issue Date shall issue any Options or
Convertible Securities or shall fix a record date for the determination of
holders of any class of securities entitled to receive any such Options or
Convertible Securities, then the maximum number of shares (as set forth in the
instrument relating thereto without regard to any provisions contained therein
for a subsequent adjustment of such number) of Common Stock issuable upon the
exercise of such Options or, in the case of Convertible Securities and Options
therefor, the conversion or exchange of such Convertible Securities, shall be
deemed to be Additional Shares of Common Stock issued as of the time of such
issue or, in case such a record date shall have been fixed, as of the close of
business on such record date, provided that in any such case in which Additional
Shares of Common Stock are deemed to be issued:
(1) no further adjustment in the Stock Purchase Price
shall be made upon the subsequent issue of Convertible Securities or shares of
Common Stock upon the exercise of such Options or conversion or exchange of such
Convertible Securities;
(2) if such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any increase or
decrease in the consideration payable to the Company or in the number of shares
of Common Stock issuable upon the exercise, conversion or exchange thereof, the
applicable Stock Purchase Price computed upon the original issue thereof (or
upon the occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities;
(3) upon the expiration of any such Options or any
rights of conversion or exchange under such Convertible Securities which shall
not have been exercised, the Stock Purchase Price computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto),
and any subsequent adjustments based thereon, shall, upon such expiration, be
recomputed as if:
a. in the case of Convertible Securities or
Options for Common Stock, the only Additional Shares of Common Stock issued were
the shares of Common Stock, if any, actually
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issued upon the exercise of such Options or conversion or exchange of such
Convertible Securities and the consideration received therefor was the
consideration actually received by the Company for the issue of all such
Options, whether or not exercised, plus the consideration actually received
by the Company upon such exercise, or for the issue of all such Convertible
Securities which were actually converted or exchanged, plus the additional
consideration, if any, actually received by the Company upon such conversion
or exchange, and
b. in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of issue of such Options, and the
consideration received by the Company for the Additional Shares of Common Stock
actually deemed to have been then issued was the consideration actually received
by the Company for the issue of all such Options, whether or not exercised, plus
the consideration actually received by the Company upon the issue of the
Convertible Securities with respect to which such Options were actually
exercised.
(ii) No readjustment pursuant to clause (3) above shall
have the effect of increasing the Stock Purchase Price to an amount which
exceeds the lower of (x) such Stock Purchase Price on the original adjustment
date, or (y) such Stock Purchase Price that would have resulted from any
issuance of Additional Shares of Common Stock between the original adjustment
date and such readjustment date.
(iii) In the case of any Options which expire by their
terms not more than 30 days after the date of issue thereof, no adjustment of
the Stock Purchase Price shall be made until the expiration or exercise of all
such Options; provided, however, that this clause (iii) shall not apply to
Options that are issued within 30 days of a transaction described under Section
3.4(c)(i) hereof.
(d) ADJUSTMENT OF STOCK PURCHASE PRICE UPON ISSUANCE OF
ADDITIONAL SHARES OF COMMON STOCK. In the event this Company shall issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Section 3.4(c)) without consideration or for a
consideration per share less than the Stock Purchase Price in effect on the date
of such issue, then and in such event, such Stock Purchase Price, as applicable,
shall be reduced, concurrently with such issue, to a price (calculated to the
nearest cent) determined by multiplying the Stock Purchase Price by a fraction:
(i) the numerator of which shall be (i) the number of
shares of Common Stock outstanding immediately prior to the issuance of such
Additional Shares of Common Stock (calculated on a fully diluted basis assuming
the exercise or conversion of all Options, Warrants or Convertible Securities
which are exercisable or convertible at the time such calculation is being
made), plus (ii) the number of shares of Common Stock which the net aggregate
consideration, if any, received by the Company for the total number of such
Additional Shares of Common Stock so issued would purchase at the Stock Purchase
Price in effect immediately prior to such issuance, and
(ii) the denominator of which shall be (iii) the number of
shares of Common Stock outstanding immediately prior to the issuance of such
Additional Shares of Common Stock (calculated on a fully diluted basis assuming
the exercise or conversion of all Options, Warrants or Convertible Securities
which are exercisable or convertible at the time such calculation is being
made), plus (iv) the number of such Additional Shares of Common Stock so issued.
(e) DETERMINATION OF CONSIDERATION. For purposes of this
Section 3.4, the consideration received by the Company for the issue of any
Additional Shares of Common Stock shall be computed as follows:
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(i) CASH AND PROPERTY. Such consideration shall:
(1) insofar as it consists of cash, be computed at the
aggregate amount of cash received by the Company excluding amounts paid or
payable for accrued interest or accrued dividends;
(2) insofar as it consists of property other than
cash, be computed at the fair value thereof at the time of such issue, as
determined in good faith by the Board of Directors; and
(3) in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets of the Company
for consideration which covers both, be the proportion of such consideration so
received, computed as provided in clauses (1) and (2) above, as determined in
good faith by the Board of Directors.
(ii) OPTIONS AND CONVERTIBLE SECURITIES. The
consideration per share received by the Company for Additional Shares of Common
Stock deemed to have been issued pursuant to Section 3.4(c)(i), relating to
Options and Convertible Securities, shall be determined by dividing:
(1) the total amount, if any, received or receivable
by the Company as consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such consideration) payable to
the Company upon the exercise of such Options or the conversion or exchange of
such Convertible Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and the
conversion or exchange of such Convertible Securities, by
(2) the maximum number of shares of Common Stock (as
set forth in the instruments relating thereto, without regard to any provision
contained therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities.
3.5 NOTICE OF ADJUSTMENT. Upon any adjustment of the Stock Purchase
Price or any increase or decrease in the number of shares purchasable upon the
exercise of this Warrant, the Company shall give written notice thereof, by
first class mail, postage prepaid, addressed to the registered Holder of this
Warrant at the address of such Holder as shown on the books of the Company. The
notice shall be signed by the Company's chief executive officer and shall state
the Stock Purchase Price resulting from such adjustment and the increase or
decrease, if any, in the number of shares purchasable at such price upon the
exercise of this Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
3.6 OTHER NOTICES. If at any time:
(a) the Company shall declare any cash dividend upon its Common
Stock;
(b) the Company shall declare any dividend upon its Common Stock
payable in stock or make any special dividend or other distribution to the
holders of its Common Stock;
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(c) the Company shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or other
rights;
(d) there shall be any capital reorganization or
reclassification of the capital stock of the Company; or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another corporation; or
(e) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, addressed to the Holder of this Warrant at the address of
such Holder as shown on the books of the Company, (i) at least twenty (20) days'
prior written notice of the date on which the books of the Company shall close
or a record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding-up, and (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, at least
twenty (20) days' prior written notice of the date when the same shall take
place. Any notice given in accordance with the foregoing clause (i) shall also
specify, in the case of any such dividend, distribution or subscription rights,
the date on which the holders of Common Stock shall be entitled thereto. Any
notice given in accordance with the foregoing clause (ii) shall also specify the
date on which the holders of Common Stock shall be entitled to exchange their
Common Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding-up or conversion, as the case may be.
3.7 CERTAIN EVENTS. If any change in the outstanding Common Stock of
the Company or any other event occurs as to which the other provisions of this
Section 3 are not strictly applicable or if strictly applicable, would not
fairly protect the purchase rights of the Holder of the Warrant in accordance
with such provisions, then the Board of Directors of the Company shall in good
faith make an adjustment in the number and class of shares available under the
Warrant, the Stock Purchase Price or the application of such provisions, so as
to protect such purchase rights as aforesaid. The adjustment shall be such as
will give the Holder of the Warrant upon exercise for the same aggregate Stock
Purchase Price the total number, class and kind of shares as he would have owned
had the Warrant been exercised prior to the event and had he continued to hold
such shares until after the event requiring adjustment.
4. ISSUE TAX. The issuance of certificates for shares of Common Stock
upon the exercise of the Warrant shall be made without charge to the Holder of
the Warrant for any issue tax (other than any applicable income taxes) in
respect thereof; PROVIDED, HOWEVER, that the Company shall not be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the then
Holder of the Warrant being exercised.
5. CLOSING OF BOOKS. The Company will at no time close its transfer
books against the transfer of any warrant or of any shares of Common Stock
issued or issuable upon the exercise of any warrant in any manner which
interferes with the timely exercise of this Warrant.
6. NO VOTING OR DIVIDEND RIGHTS; LIMITATION OF LIABILITY. Nothing
contained in this Warrant shall be construed as conferring upon the holder
hereof the right to vote or to consent or to receive notice as a stockholder of
the Company or any other matters or any rights whatsoever as a stockholder of
the Company.
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No dividends or interest shall be payable or accrued in respect of this
Warrant or the interest represented hereby or the shares purchasable
hereunder until, and only to the extent that, this Warrant shall have been
exercised. No provisions hereof, in the absence of affirmative action by the
holder to purchase shares of Common Stock, and no mere enumeration herein of
the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the Stock Purchase Price or as a stockholder of
the Company, whether such liability is asserted by the Company or by its
creditors.
7. WARRANT TRANSFERABLE. Subject to compliance with applicable federal
and state securities laws, this Warrant and all rights hereunder are
transferable, in whole or in part, without charge to the holder hereof (except
for transfer taxes), upon surrender of this Warrant properly endorsed; provided,
however, that no transfer of rights hereunder to purchase less than 25,000
shares of Common Stock shall be effective without the prior written consent of
the Company and any such purported transfer without the Company's consent shall
be void. Subject to the foregoing restrictions, each taker and holder of this
Warrant, by taking or holding the same, consents and agrees that this Warrant,
when endorsed in blank, shall be deemed negotiable, and that the holder hereof,
when this Warrant shall have been so endorsed, may be treated by the Company, at
the Company's option, and all other persons dealing with this Warrant as the
absolute owner hereof for any purpose and as the person entitled to exercise the
rights represented by this Warrant, or to the transfer hereof on the books of
the Company any notice to the contrary notwithstanding; but until such transfer
on such books, the Company may treat the registered owner hereof as the owner
for all purposes.
8. RIGHTS AND OBLIGATIONS SURVIVE EXERCISE OF WARRANT. The rights and
obligations of the Company, of the holder of this Warrant and of the holder of
shares of Common Stock issued upon exercise of this Warrant, referred to in
Section 7 shall survive the exercise of this Warrant.
9. CALL OF WARRANT; EARLY TERMINATION.
9.1 GENERAL. This Warrant may be called by the Company at any time
after the closing sales price of the Company's Common Stock as reported on the
Nasdaq National Market for each trading day during any ninety (90) trading day
period exceeds $15.00 per share (subject to adjustment for stock splits, stock
dividends or reorganizations) during the Exercise Period. The Company may
thereafter exercise its right to call this Warrant by providing written notice
to the Holder of this Warrant, by first class mail, postage prepaid, addressed
to the Holder at the address of such Holder as shown on the books of the
Company, at least ten (10) days' prior to the day specified by the Company for
termination of this Warrant (the "Call Date"). Such notice shall specify the
Call Date and shall summarize the procedures for exercise of this Warrant prior
to the Call Date. If the Company elects to call this Warrant pursuant to this
Section 9.1, the Company must call the entire Warrant. This Warrant shall
terminate at 5:00 p.m. (Pacific Time) on the Call Date; and upon such
termination, the Holder shall have no further rights hereunder.
9.2 NET EXERCISE. In the event that this Warrant is called
pursuant to Section 9.1 at any time after , 1999, in lieu of
exercising this Warrant by payment of cash, the Holder may elect to receive
shares equal to the value (as determined below) of this Warrant (or the
portion thereof being canceled) by surrender of this Warrant at the principal
office of the Company together with the properly endorsed Form of
Subscription and notice of such election in which event the Company shall
issue to the Holder a number of shares of Common Stock computed using the
following formula:
X = Y (A - B)
---------
A
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Where X = the number of shares of Common Stock to be issued
to the Holder
Y = the number of shares of Common Stock purchasable under
the Warrant or, if only a portion of the Warrant is
being exercised, the portion of the Warrant being
canceled (at the date of such calculation)
A = the fair market value of one share of the Company's
Common Stock (at the date of such calculation)
B = Stock Purchase Price (as adjusted to the date of such
calculation)
For the purposes of this Section 9, the fair market value of one share
of Common Stock shall be (a) two times the Stock Purchase Price during the
first and second years of the Exercise Period and (b) three times the Stock
Purchase Price during the third through sixth years of the Exercise Period.
This net exercise provision shall not be available in the event of any Call
Date prior to , 1999.
10. MODIFICATION AND WAIVER. This Warrant and any provision hereof may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
11. NOTICES. Any notice, request or other document required or permitted
to be given or delivered to the holder hereof or the Company shall be delivered
or shall be sent by certified mail, postage prepaid, to each such holder at its
address as shown on the books of the Company or to the Company at the address
indicated therefor in the first paragraph of this Warrant or such other address
as either may from time to time provide to the other.
12. BINDING EFFECT ON SUCCESSORS. This Warrant shall be binding upon any
corporation succeeding the Company by merger, consolidation or acquisition of
all or substantially all of the Company's assets. All of the obligations of the
Company relating to the Common Stock issuable upon the exercise of this Warrant
shall survive the exercise and termination of this Warrant. All of the
covenants and agreements of the Company shall inure to the benefit of the
successors and assigns of the holder hereof.
13. DESCRIPTIVE HEADINGS AND GOVERNING LAW. The description headings of
the several sections and paragraphs of this Warrant are inserted for convenience
only and do not constitute a part of this Warrant. The corporate law of the
State of Delaware shall govern all issues concerning the relative rights of the
Company and the Holder. All other questions concerning the construction,
validity and interpretation of this Warrant shall be construed and interpreted
according to the law of the State of California, without giving effect to its
conflict of law provisions.
14. LOST WARRANTS. The Company represents and warrants to the Holder
hereof that upon receipt of evidence reasonably satisfactory to the Company of
the loss, theft, destruction, or mutilation of this Warrant and, in the case of
any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Company, or in the case of any such mutilation upon
surrender and cancellation of such Warrant, the Company, at its expense, will
make and deliver a new Warrant, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Warrant.
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15. FRACTIONAL SHARES. No fractional shares shall be issued upon exercise
of this Warrant. The Company shall, in lieu of issuing any fractional share,
pay the holder entitled to such fraction a sum in cash equal to such fraction
multiplied by the then effective Stock Purchase Price.
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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly
executed by its officers, thereunto duly authorized this day of ,
1998.
CORVAS INTERNATIONAL, INC.
By:
-------------------------------------
RANDALL E. WOODS
President and Chief Executive Officer
Attest:
----------------------------------
Jean S. Ellis, Corporate Secretary
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